By GABEY GOH
PETALING JAYA: Today's consumers want multichannel access to a brand's products, as well as a choice of platform to make their purchases.
Because of this, e-commerce is seeing stronger plays in business investment considerations by companies, according to industry researcher Gartner.
"e-Commerce capabilities are becoming the key foundation of the overall consumer experience," said Praveen Sengar, principal research analyst at Gartner's Business Applications Team.
"There is a growing need for businesses to properly invest, in order to better adapt to these changing consumer norms."
Sengar said the tipping point is already being reached in the region. "In 2010, we got 500 enquiries about e-commerce vendors. Last year we received 753, which is a 50% jump and we are expecting more this year," he said.
He said that among the benefits of adopting the right e-commerce strategy is lower overall cost of selling, high profitability, and better consumer loyalty via multiple channel engagement.
A critical component of e-commerce deployment that companies cannot ignore, he said, is mobile and social media platforms.
According to Gartner, 60% of e-commerce implementations by 2014 will address communities, mobile users and Internet-enabled devices.
In addition to that, it forecasts that companies will generate 50% of web sales via social media and mobile applications by 2015.
However, he admitted that there are many challenges that businesses still need to overcome before they can reap the benefits.
These include driving sales volume in a space defined by extreme segmentation and raising the conversion rate of queries to sales which currently stands at a low 1% to 3%.
Customer fulfilment and logistics are the other challenges for companies, with the security of financial transactions over the Web another key concern at this time.
"Malaysians are still adverse to mobile payments and more work needs to be done on the e-payment eco-system.
"The market is about three years behind and there needs to be a joint effort by all the stakeholders to enable further development," Sengar said.
In the interim, using digital platforms as a starting point, the incorporation of alternative models of payments such as cash on delivery, have proved more suitable in the local market.
"Adoption and deployment of e-commerce platforms must not be thought of in terms of short-term gains. This must be regarded as a strategic initiative because any return on investment would be one or two years away," he added.